BANGKOK — Asian stocks fell Wednesday after a meeting of Europe’s finance ministers failed to stem fears that the euro currency union is hurtling toward a breakup. Banking stocks slumped after some of the world’s top financial institutions were slapped with a credit rating downgrade.
Benchmark oil hovered below $99 per barrel and the dollar rose against the euro but fell against the yen.
Japan’s Nikkei 225 index dropped 1.2 percent to 8,376.45 and South Korea’s Kospi shed 0.7 percent to 1,841.79. Hong Kong’s Hang Seng lost 1.9 percent to 17,911.21. Australia’s S&P/ASX 200 fell marginally to 4,099.
Benchmarks in Singapore, Taiwan and mainland China were also lower. Indonesia, Malaysia and New Zealand rose.
Sentiment was dented after a meeting in Brussels of finance ministers from the 17 countries that use the euro ended without an announcement on plans to contain the debt crisis that is threatening to shatter the currency union.
The ministers sent debt-riddled Greece $10.7 billion to stem an immediate cash crisis, but they kicked more difficult issues — such as whether countries should cede some control over their finances to a central European authority — to the leaders of the European Union who meet next week.
In the latest sign of trouble, Italy was forced to pay a high interest rate on an auction of three-year debt Tuesday. The 7.89 percent rate was nearly three percentage points higher than last month, an enormous increase.
If Italy were to default on its debt of $2.5 trillion, the fallout could spell ruin for the euro common currency and send shock waves through the global economy. Such a prospect has left little appetite for risky assets.
Analysts at Credit Agricole CIB said in a report that “until concrete and detailed plans for a solution to the crisis are announced, the downward trend” in stocks will continue.
Ratings downgrades for many of the world’s largest banks also drove investors to the sidelines, analysts said. Standard &Poor’s on Tuesday lowered its credit ratings for 37 financial companies, including Bank of America Corp., Citigroup Inc. and HSBC Holdings PLC.
“The downgrade is affecting local stock market sentiment,” said Dickie Wong, executive director of research at Kingston Securities Ltd. in Hong Kong. “I believe it gives pressure on the international banking sector, and some local banks will probably be down quite a bit today.”
Hong Kong-listed Industrial &Commercial Bank of China, the world’s largest bank by market value, fell 2.3 percent. Japan’s Mizuho Financial Group lost 2 percent and Hong Kong shares of British bank HSBC Holdings fell 2.6 percent.
Insurance companies also fell. Hong Kong-listed China Life Insurance Co., the country’s biggest life insurer, lost 3.5 percent. Ping An Insurance fell 5 percent. Japan’s Tokio Marine Holdings shed 2.2 percent.
On Wall Street on Tuesday, a jump in U.S. consumer confidence sent stocks modestly higher. The Dow Jones industrial average rose 0.3 percent to close at 11,555.63. The Standard &Poor’s 500 index rose 0.2 percent to 1,195.19. The Nasdaq composite, which consists mostly of technology stocks, fell 0.5 percent to 2,515.51.
The Conference Board, a private research firm, said its Consumer Confidence Index climbed 15 points in November to 56.0 — an improvement, but still well below the level of 90 that indicates an economy on solid footing.
Benchmark crude for January delivery was down 63 cents to $99.16 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.58 to settle at $99.79 on Tuesday.
In currency trading, the euro slipped to $1.3328 from $1.3331 late Tuesday in New York. The dollar slipped to 77.88 yen from 77.93 yen.
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